By now you’ve probably had that “morning after feeling” for Christmas. Any Christmas spirit that may have lingered after the event has well and truly vanished now that most folks will have had their Christmas Credit Card Bombshells Bills through.

Hopefully you followed my advice to live according to your means, and the bombshell was more of a pleasant surprise instead. But sometimes, good intentions just aren’t enough.

Exploring the alternatives for making extra income can be an overwhelming process, especially if you don’t know where to start. Before taking on a second job just to cover a few days of silly spending, however, there are methods that you can employ to earn money from home on your own time. A creative approach to the solution of debt reduction may lead you to sell DVDs online, tap into your creative talents, or use your professional expertise outside of your full-time job. Here are some ideas you might not even have considered …

Write for money

If you possess an excellent command of the English language, you can use it to make you money. Writing for blogs is a great way to receive an extra pay packet, and it can often be done from home, which means that you won’t have to spend money on a commute, and you can make it fit with your current schedule. If you have a hobby or any personal interests, such as cars, fashion, or sports, try to find a web site or publication that will pay you for your expertise or opinion.

(And let’s be brutally honest – if I can manage it …)

Turn your hobby into a part-time business

If you are particularly skilled at an activity, such as baking, painting, doll-making or gardening, consider transforming your talent into extra income with a side business. You won’t need a fancy business plan or advertising; you can operate solely on the materials that you already have in your possession to get started and spread the word to friends and family who are willing to buy from you. Slowly gaining more income from your hobby is a low-cost, easy way to help pay off your financial obligations and a way to not only do what you enjoy doing, but get paid for it as well.

Sell your unwanted items

The Internet can be a useful tool in finding buyers for the belongings that you don’t want, don’t need, don’t have a use for anymore, or never wanted in the first place (unwanted Christmas presents included!). You can sell everything from clothing to exercise equipment on web sites like Gumtree or eBay. You can sell DVDs online along with CDs and video games without having to pay for the shipping or even leave your home through MusicMagpie, which is another useful site that can help you turn these items into cash.

Help others advance their careers

This is a good option for professional careerists who know what to do and what not to do to land a job. In the economic recovery, many people will be putting themselves on the job market for the first time in years, and you can offer your services as a resume editor and interview coach to put them on the path to employment. To set yourself apart from the competition and gain a wide client base, undercut the service of competitors by one or two per cent.

The key message is even in a downturn, certain areas of business will flourish.

Become a tutor

If you’ve yet to land that first post-graduate job, you can still use your know-how to make money from home. University students can offer to tutor their fellow scholars in a particular subject area. This kind of work is also flexible, which is a big plus for students searching for a way to make money around their class schedules. To make sure that your tutorials make a lasting impact, consider coming up with your own teaching materials for students who don’t learn well by the book.

With GCSE and A-Level students soon to be gearing up for exams again, now could be the time to find out if teaching one-to-one is something you find rewarding not just in a financial sense but also a psychological one.

(For most of these endeavors, a state-of-the-art computer is a great asset. Use this Lenovo promotional code and save money on technology!)

Paying tax may be something that we all have to do, and there might not be any way to get out of it, but there’s no reason to pay more than you absolutely have to. Take your savings account as an example: chances are that if you’re over 18 and not a student, you’ll be paying tax on the interest you earn on your savings. If you have investments, you’ll most likely have to pay tax on the dividends you earn, right?

However, there are also some interesting investments that you can make that help you to beat the tax man, perfectly legally. Probably the best known, and one of the most popular examples of this, is the stocks and shares ISA. Let’s find out more… 

ISA Investment – The Basics

Many people are already familiar with how a shares ISA works, but here’s a quick overview just in case. Essentially, ISAs offer you a tax-free form of savings. This means that you don’t have to pay tax on any interest or dividends you earn through your investment ISA. This means you maximise your investment and make sure your money is working is hard as it possibly can.

There are a couple of things to note when it comes to shares ISAs: there is an annual investment limit, which means you can only put a certain amount of money into your ISA in a single tax year. The current ISA allowance for 2011/2012 is £10680. You can choose to invest all of this in your shares ISA or split it and put half into a cash ISA instead – it’s up to you.

It’s also worth knowing that there are quite a few different shares ISAs around, from climate change ISAs (investing in companies that have lighter than average carbon footprints) to FTSE tracker ISAs, so it’s worth looking around to see which one would be best for you.

A good option, for many reasons…

But why should you consider investing in a shares ISA? There are lots of reasons you might want to invest your money, my friend Jason started an investment ISA after receiving some money from his family. His parents had downsized their property and, very kindly, passed some of the money they made on the sale down to their son with the aim of helping him get on the property ladder.

Of course, the property market being what it is, even his parents’ generous donation plus what he’d already saved couldn’t finance his mortgage deposit, so he decided to take the chance and go for an ISA with the aim of maximising his investment and eventually raising a deposit. In this case, he chose a FTSE all-share tracker ISA, which invests in all of the companies listed on that index.

Why that ISA? Essentially, he didn’t want to put all his eggs in one basket and was fairly new to investing so spreading the risk over a large number of companies seemed prudent. There were other options, but based on his situation and goals, he decided that one was best for him.

That’s not the only reason people consider investing in ISAs, though. You might come into money due to a competition win, a bonus from work, your own house sale or inheritance. You might be saving for a car, a holiday, your kids’ education, a rainy day… The important thing is making sure you choose the right ISA for your needs.

 Is the risk worth it?

As you probably know, there is a risk attached to shares ISAs. This is because they are investments and, like any investments, they aren’t guaranteed to grow. This means it’s a good idea to evaluate the risk before taking the plunge and do some research into different ISAs to make sure you get one with a good reputation. We can’t deny that some ISAs do underperform; however, the best stocks and shares ISAs are careful about where they invest and even though the economy has seen its ups and downs of late, there are still some very good ISA success stories around.

Also, if you invest wisely, it is possible to spread the risk and limit your chances of an unfortunate investment. For example, there are bonds and gilts ISAs available, which are still investments but are lower in risk than other ISAs attached to the stock market. You could alternatively split your money between a cash ISA and a share ISA, or put some into a regular savings account so you’re limiting how much is at stake.

Plus, there is a risk in not moving your money. It’s said that people are more likely to get divorced than they are to move their bank accounts, and millions of people end up leaving their money in savings accounts where the value is actually going down due to inflation and low interest rates. There might be a risk involved with shares ISAs, but there’s still a good chance your money will grow, unlike many current and saving accounts – and if you look at the performance of many ISAs over the past three years, it’s easy to see that even in challenging circumstances, it’s still possible for significant gains to be made.

There are two primary kinds of loans available on the market today – secured, and unsecured loans. Secured loans are loans in which some type of collateral is used to hold the loan; usually this is the borrower’s home, or perhaps a car in the case of hire purchase. If the borrower defaults on the loan, the lender has the option of taking possession of the collateral. Unsecured loans, on the other hand, do not require collateral to obtain.

Secured Loan Limits and Lenders

In most cases, lenders limit the amount of unsecured loans to between £15,000 and £20,000. Unsecured loans can be used for any reason, from taking the vacation of your dreams to having a medical procedure done, to starting a new business to consolidating debt. Although the lender may ask you what you plan on doing with the money on the loan application, really it is up to you how you use the money once you receive it.

Common lenders for unsecured loans are banks, credit unions, online loan companies and specialist lenders. Generally, lenders want you to have good to excellent credit before they will lend you money for an unsecured loan. You must also be able to demonstrate that you are gainfully employed and can afford the loan payments.

Online lenders often offer better terms than banks or credit unions. Additionally, the application process is often very fast and easy. Generally, you only need to fill out an online application and provide details such as your employment information, the amount of money you want to borrow and what you intend to do with the money. In some cases, you will need to fax a copy of your most recent pay slip to the lender. With online lenders, applications are often approved within 24-48 hours and the money is transferred into your bank account right away.

Despite the ease with which online loans can be arranged, due care should be taken to avoid “Pay Day” loan companies, whatever your circumstances. With typical APR’s in the region of 2,000-8,000% it is an extortionately expensive way of obtaining a loan for longer than a few days and despite the welcoming façade such companies present, they remain dangerous traps to the unwitting.

For individuals who are self employed, it may be necessary to use a specialist lender for an unsecured loan. Specialist lenders are often more willing to work with individuals who are considered high risk, such as individuals who do not have a long credit history or whose income is less stable due to self employment. If you are self employed, you may need to supply copies of your tax returns or business accounts for the past several years to prove your income.

Smart Use of Unsecured Loans

If you decide you want to take out an unsecured loan, do not borrow more than you can afford to repay, and consider other means of raising required capital such as saving. If you fail to meet the terms of the loan, it could be detrimental to your credit history. Even late payments will have a negative impact on your credit and influence your ability to get a mortgage or car loan in the future.

Unsecured loans are often for a term of between two to 10 years and are at a fixed rate of interest. If you find yourself having problems making payments, contact your lender immediately. Lenders are often more willing to work with you to renegotiate the loan if you communicate with them openly and honestly as soon as possible.

Before taking out an unsecured loan, shop around different lenders to find the best loan terms possible. Make sure you completely understand the terms of the loan before signing the loan documents and accepting any payments. A  final precautionary tale to shopping around is that that quoted APR’s are not necessarily the rate you will receive, and applying for a loan will impact your credit rating as it will record a search, even if you later choose not to go ahead with it.